Tech Mahindra FY25 Annual Earnings Summary

Communications vertical declined 1.7% YoY as clients prioritize cost savings; U.S. telecom remains stressed.

Manufacturing declined 2.5% QoQ due to Pininfarina and European auto pressures; North American telco discretionary spend remains challenged.

Management noted softness in US high-tech and auto sectors, with delayed BPS ramp-ups and cautious discretionary spending.

Management acknowledged that margin expansion requires revenue growth, and current macro stress may delay FY27 targets.

Management noted telecom sector remains challenged; while decline moderated to single digits, no immediate upturn is expected.

Management acknowledged that BFSI vertical is relatively small, so a few million dollars can cause quarter-to-quarter volatility.

Management noted competitors making 'heroic assumptions' on productivity, potentially leading to aggressive pricing that TechM avoids.

Q3 is seasonally weak due to furloughs; management has limited visibility on magnitude this early.

Manufacturing vertical declined 4% QoQ due to softness in auto, especially in Europe and U.S.

Large deal wins are inherently lumpy; a quarter without major closures could slow revenue growth momentum.

Wage hikes of 1-1.5% will pressure Q4 margins; offsetting levers may not fully compensate.

Significant cross-currency headwinds impacted reported revenue; hedging may not fully offset if INR depreciation continues.